Brazil's Raia Drogasil hits brakes on drugstore expansion

Reuters Staff

2 Min Read

SAO PAULO, Dec 18 (Reuters) - Raia Drogasil SA, Brazil’s largest drugstore chain, is opening new stores in three states on Brazil’s northern coast, marking the end of its foray into new markets for now, but its investment cycle will continue, a top executive told Reuters on Monday.

Raia Drogasil opened stores in the state of Piaui and is set to open stores in 2018 in the nearby states of Maranhao and Para.

The company would face logistical difficulties if it expands further, Eugenio De Zagottis, vice president of planning and investor relations, said.

The new stores in the three states will “close a cycle of geographic expansion for the company,” he said.

Like other Brazilian retailers aiming to take advantage of a nascent consumer rebound in Latin America’s economy, the company is still making major investments in its current markets, such as Sao Paulo state.

In November, Raia Drogasil said it would launch 240 store openings in 2018 and 240 openings in 2019. The chain has opened 198 branches so far in 2017. (Reporting by Paula Arend Laier; Writing by Gram Slattery; Editing by Jeffrey Benkoe)